UGX 536 Billion for Gov’t Projects Not Utilized- Auditor General

A new audit report released by the Auditor General has revealed 536.5 billion Shillings for 36 government projects have not been absorbed.

This is highlighted in the audit report for the financial year 2020/2021 presented to the Deputy Speaker of Parliament, Anita Among on Wednesday by Auditor General John Muwanga.

During the financial year under review, Parliament approved a national budget of 45.4 Trillion Shillings and later revised it to 51.6 trillion Shillings through supplementary budget allocations. 

According to the audit report, 36 projects failed to absorb funds availed to them for implementation of activities and as a result, a total of 431 billion Shillings and US Dollars 30.2 million (105.5 billion Shillings) remains on project accounts.

Muwanga notes this as one of the major reasons that affect service delivery within the government. This follows his review of reasons why the government continues to face challenges in the delivery of services to citizens despite the allocation of funds to Ministries, Departments, and Agencies – MDAs every year.

Edward Akol, the Acting Assistant Auditor General in charge of Audits, said that the failure to absorb project funds was mainly attributed to the fact that disbursement of any project funds depends on the utilization and full accountability of prior disbursements which was still a challenge for most projects.

He further notes that the absorption level was affected by the Covid-19 pandemic, also noting that failure to absorb project funds affects subsequent disbursements which, implementation of project activities thereby affecting service delivery.

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Also highlighted by the Audit Report is the delayed procurement processes in different government entities as another reason that affects service delivery.

“I noted that a sample of 56 procurements worth 2.3 trillion Shillings had delays in completing the procurement processes. In some cases, the time taken between procurement initiations and contract signing was more than 5 months,” reads part of the audit report.

The report attributes the delays in procurements to numerous administrative reviews, inefficiencies within the Procurement and Disposal Units –PDUs, and Covid-19 which resulted in entities operating at 30 percent.

Akol says that delayed procurements result in delayed commencement of works and loss of implementation time hence affecting service delivery.

He also notes delayed progress of works and constructions and abandoned works as other issues affecting service delivery.

Under delayed constructions, Akol noted slow progress of works in a sample of 58 works project worth 694 billion Shillings while 13 cases of works worth 21.3 billion had been abandoned by contractors.

“A comparison of the expected dates of completion of works and progress at the time of audit revealed that works were behind schedule sometimes by more than 5 months,” said Akol.

He further attributed abandoned works to weaknesses in contract supervision, cash flow problems of contractors, and the limited capacity of contractors.

Akol says that abandoned works imply that the services that were anticipated from the completed works will not be achieved and more time would be required if the works are to be retendered which results in further delays.

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The audit report also reveals delayed delivery of supplies and the auditors highlight 12 cases worth 70.7 billion where deliveries were delayed.

“This was attributed to the impact of Covid-19 that caused disruptions in the international movement of goods, limited capacity of contractors, weaknesses in contract supervision, and restrictions in movement put in place to curb the spread of Covid-19. This results in delayed service delivery to the beneficiaries,” said Akol.

Akol says that failure to deliver expected services to beneficiaries negates the purpose of allocation of resources to entities and diminishes confidence in government processes regarding allocation and utilization of resources.

The Auditor-General advised the government to ensure that entities undertake procurements in a timely manner, and to strengthen contract supervision in order to mitigate against the effects of poor contract management. Muwanga also recommends that government develops a strategy and contingency plans for mitigating the effects of Covid-19 on service delivery.

Among said that the presentation of the audit report will enable the Accountability Committees of the 11th Parliament to have business.